What You Need To Know About Attribution
Data & Analytics
Mar 25 2021
If you’ve ever wondered why some of your marketing campaigns perform better than others, defining an attribution strategy for your digital advertising will be a game changer for your brand. After all, 60% of marketers believe data-driven attribution is essential to understanding the journeys high-value customers take to purchase.
Understanding the basics behind different attribution models can help your business optimize your digital efforts and maximize your ad dollars efficiently.
What is Attribution?
Attribution is all about understanding what influenced your customers to make a purchase. In terms of digital advertising, attribution is the process of identifying a set of user actions or events across screens and touch points that contribute in some manner to a desired outcome, and then assigning value to each of these events.
Values assigned to each event along the buying journey determine how different efforts are performing and their weight of influence in the purchase decision. Digital attribution is done at a user-specific level, as opposed to the macro level to gain an understanding of ROI, which is typically used by traditional media.
Marketers use attribution to get a better picture of when and how various marketing channels contribute to conversion events to better understand consumers and what messages or channels resonate.
Why Is Attribution Important?
No one wants to waste precious ad dollars on tactics that don’t convert. Attribution is the clearest way of showing exactly where your marketing dollars are going and what impact they’re having on conversions. This not only helps accurately assign budgets but also uses data to justify your marketing spend to management,
As you assign campaign spending and determine business priorities, attribution can help you fine-tune your marketing strategies to maximize impact. Attribution can vary between brands or even products from the same brand because each model has aspects that are better suited for different customer journeys.
Attribution Models For Measurement
Every brand has their own ideal customer journey and a differing number of touchpoints a customer typically engages with. These factors are important when determining what attribution model makes the most sense for your brand. You also need to have a clear picture of what you hope to achieve through your campaigns, what your average customer buying cycle looks like, and the lifetime value your loyal customers provide.
There are five different types of attribution models:
Last Interaction attribution:
Last-click is a widely-used method of attribution and is the default setting for Google Analytics. This model credits a customer’s conversion entirely to their final interaction with your brand. It provides valuable insight into why a customer ultimately completed the transaction; however, it doesn’t provide the context of how many interactions a customer had with the brand and doesn’t provide insight into what aided the customer’s interest and discovery of a brand or product in the first place.
First Interaction attribution:
On the other end of the spectrum, first-touch modeling credits conversions to the customer’s first interaction with a brand. While this model also doesn’t give a holistic view of the customer’s journey, it is helpful for brands with shorter buying cycles and more impulsive buyers. It is also a good way to measure the impact of top-of-funnel, brand awareness campaigns.
For a more balanced look at an advertising strategy, marketers can utilize linear attribution. Linear gives every touchpoint, from discovery to sale, equal weight. While this reveals a clearer picture of how a customer arrived at their decision to buy, it does not give insight into which touchpoints were more influential than others.
Position Based attribution:
Position-based attribution is a combination of the above methods. Like linear attribution, it considers every touchpoint in a customer’s journey, but it gives heavier weight to both the first and last interaction. This method works well for brands that tend to have a customer journey with many touchpoints, as it gives marketers the opportunity to see which interactions are leading to discovery and conversions.
Time Decay attribution:
The time decay attribution model places an emphasis on the interactions towards the end of the buying cycle, with each sequential interaction receiving an increasing share of the credit. While this minimizes top-of-funnel campaigns, it can be helpful for understanding which touchpoints make an impact on a customer ultimately converting.
The sooner you begin to measure the impact of your campaigns, the sooner you can begin to optimize to increase brand awareness, boost sales, and maximize your ad spend.